Motilal Oswal's research report on Vinati Organics
Vinati Organics (VO)’s 1QFY25 revenue came in below our estimate at INR5.2b. Gross margin declined 270bp YoY to 44.9%, while EBITDAM was up 100bp YoY at 23.8%. EBITDA increased 25% YoY to INR1.3b and PAT grew 24% to INR860m (our est. INR1.1b). The management noted that 1QFY24 result was restated to give effect to the scheme of merger approved by NCLT. VO’s global market share in ATBS is 62-65%. VO is enhancing its ATBS capacity by 50%, which is expected to come online in 2H. Revenue from the Butyl Phenol (BP) segment was INR3b in FY24. The management in its previous concall highlighted that it expected peak revenue of INR3-3.2b. The customized products portfolio is expected to deliver good growth going forward as well.
Outlook
We continue to believe that VO’s long-term growth outlook is healthy. The stock is trading at ~39x FY26E EPS of INR54 and ~28x FY26E EV/EBITDA. It had a fixed asset turnover of 1.5x as of FY24. We value the company at 45x FY26E EPS to arrive at a TP of INR2,425. We reiterate our BUY rating on the stock.
For all recommendations report, click here
Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
Find the best of Al News in one place, specially curated for you every weekend.
Stay on top of the latest tech trends and biggest startup news.
